What is the answer to not enough employers offering high-quality apprenticeships? This is the central question facing the English skills system, as we celebrate another National Apprenticeships Week. To think, there are more young people chasing an apprenticeship place today than there are students applying to Oxbridge. The coalition says it has created more than one million additional apprenticeships since it came to office in 2010. Moreover, since 2007 apprenticeship volumes have increased by a staggering 135 per cent.
But these figures gloss over the fact that, internationally, England lies towards the bottom of the league tables for the ratio of apprentices per one thousand workers. Recent research by the International Skills Standards Organisation – a workforce development consultancy – found that out of five English-speaking countries, England lies in third place – behind Australia and Canada, offering just 20 apprentices for every one thousand workers employed.
The figure in Australia is 40 apprentice employees per one thousand workers while Germany, of course, tops the league at nearly 80 apprentices per one thousand workers. To give a more local perspective, in the City of Brighton and Hove, there are around 5,000 young people (18-24-years old) claiming job seeker’s allowance. The National Apprenticeship Service website shows that there is currently only 59 apprentice vacancies within a 30-mile radius of the city, and 643 vacancies within a 100-mile radius. The country desperately needs more employers stepping up to the plate. Currently, less than 10 per cent of all firms offer any form of apprenticeship.
This is the true scale of the challenge that the next Labour government will inherit. Tackling decades of underperformance will not be solved overnight. As part of the Agenda 2030 long-term growth plan announced by shadow business secretary Chuka Umunna this week, the party in government should pursue a three-pronged attack that systematically addresses: employer take-up; training quality; and more responsive delivery. There is a huge amount that can be learned internationally about what works.
Employer take-up can be improved in two ways. First, the government as employer can set clear and binding targets for the recruitment of apprentices in the public sector, particularly in Whitehall departments. Funds from the planned jobs guarantee could be used to incentivise public employers to offer places paying the national minimum wage. Second, to increase take-up in the private sector, the bank levy could be used to target apprentice wage subsides at small and micro-firms, while public sector procurement policy is utilised in a much smarter way to leverage commitments from all employers to take on apprentices. Meanwhile, private firms with more than 250 employees should no longer receive public subsidy for apprentice training in future. The likes of Rolls-Royce, PwC, Unilever and Whitbread should be reinvesting their own profits in apprentice training because of the productivity gains it will give them.
These measures could create an additional 400,000 apprenticeship places over the lifetime of the next parliament, putting England second only to Germany in the global apprenticeship race.
Improving the quality of apprenticeships has to be put centre-stage. Many of the recent scandals around poor quality provision could have been avoided with clearer accountability. At present, no fewer than 30 separate bodies have a role in funding and quality-assuring apprenticeships. This could be reduced to a single body, through the establishment of the Office of the Commissioner for Apprenticeships Standards England. Just one organisation in future would report annually to parliament, ensuring that ministers are no longer solely responsible for the overall integrity of the apprenticeship system. These reforms would also help save money currently wasted by various skills quangos.
Finally, England needs a revolution in how providers work with firms in a more customer-driven way. The Richard review of apprenticeships made some helpful suggestions, but it focused too much on rubbishing the current players. By stealth, the government has abolished the sector skills councils introduced by Labour, when the solution is in fact to support much stronger industry associations. As in Australia, employers need to be encouraged to come together collectively to provide apprenticeship solutions. The current ideology of ‘employer ownership’ of skills belies the fact that meeting the challenge of more high-quality apprenticeships is a shared responsibility between employers, individuals and government. It is too important an issue to be left completely to the market. That is what the experience of the best countries tells us.
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Tom Bewick is director and chief economist at the International Skills Standards Organisation. He tweets @tombewick and has previously written on skills for ProgressOnline here
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